Telephone Excise Tax Refund Info
I've seen a few of you post about this, but I wanted to go a bit further and explain the refund a bit more. I've already had one person freak out at me about "don't take it if you think you're going to be audited" or something insane like that. :P
This year and this year only, there is a credit (not deduction) available on your 2006 federal tax return for the refund of the federal excise taxes paid on your phone bills between February 28th, 2003, and August 1st, 2006. Anybody who has paid even a single bill during that time frame is eligible for this credit. The credit is available in two ways, a standard amount or the actual amount, and you can take the larger of the two. The standard amount is $30 for a person with one exemption, and increases by $10 for each exemption after the first up to a maximum of $60. If, however, you have on-hand or access to your phone bills for that time frame, you can get a credit for the actual amount of the excise tax you paid. It will be listed directly on your bill as "Federal Excise Tax" or sometimes just simply "FET". (I've found that my actual amount was far larger than the standard amount.) Also, if you know what your monthly charges were during that time frame, the federal excise tax was a 3% tax against the actual service charges, excluding any additional feature charges (e.g. text messages, caller ID, etc).
What counts as a refund-eligible service is any "bundled service" which included both local and long distance calling for a single fee. Specifically, as long as your long distance fee was not a separate charge, it counts. From the IRS's article on this:
Bundled service plans include, for example, Voice over Internet Protocol (VoIP) service, and landline and wireless (cellular) service plans that provide both local and long distance service for either a flat monthly fee or a charge that varies only with the elapsed transmission time for which the service is used. Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. If VoIP service provides both local and long distance service and the charges are not separately stated, such service is bundled service.
This credit is listed directly on the 1040 form variants. For more information, head to http://www.irs.gov/newsroom/article/0,,id=164032,00.html and, in particular, the Q&A at http://www.irs.gov/newsroom/article/0,,id=161506,00.html.
This year and this year only, there is a credit (not deduction) available on your 2006 federal tax return for the refund of the federal excise taxes paid on your phone bills between February 28th, 2003, and August 1st, 2006. Anybody who has paid even a single bill during that time frame is eligible for this credit. The credit is available in two ways, a standard amount or the actual amount, and you can take the larger of the two. The standard amount is $30 for a person with one exemption, and increases by $10 for each exemption after the first up to a maximum of $60. If, however, you have on-hand or access to your phone bills for that time frame, you can get a credit for the actual amount of the excise tax you paid. It will be listed directly on your bill as "Federal Excise Tax" or sometimes just simply "FET". (I've found that my actual amount was far larger than the standard amount.) Also, if you know what your monthly charges were during that time frame, the federal excise tax was a 3% tax against the actual service charges, excluding any additional feature charges (e.g. text messages, caller ID, etc).
What counts as a refund-eligible service is any "bundled service" which included both local and long distance calling for a single fee. Specifically, as long as your long distance fee was not a separate charge, it counts. From the IRS's article on this:
Bundled service plans include, for example, Voice over Internet Protocol (VoIP) service, and landline and wireless (cellular) service plans that provide both local and long distance service for either a flat monthly fee or a charge that varies only with the elapsed transmission time for which the service is used. Telecommunications companies provide bundled service for both landlines and wireless (cellular) service. If VoIP service provides both local and long distance service and the charges are not separately stated, such service is bundled service.
This credit is listed directly on the 1040 form variants. For more information, head to http://www.irs.gov/newsroom/article/0,,id=164032,00.html and, in particular, the Q&A at http://www.irs.gov/newsroom/article/0,,id=161506,00.html.